Interest Rate Derivatives Overview

Interest rate risk management is becoming increasingly important not just for the financial sector, but for the household sectors as well. Interest rate derivative products are the primary instruments available to manage such risks. Interest Rate Derivatives: A Beginner’s Module aims at creating a better understanding of the concepts underlying the money market and giving insights into the motives of and operations related to the trading of interest rate derivatives.”


Who will benefit Interest Rate Derivative course?
  • Students
  • Teachers
  • Employees of Banks, Insurance Companies”
  • Primary Dealers
  • Employees of Brokers/Sub-Brokers
  • Anybody having interest in the Indian money market
Why should one take this course?
  • To understand the concept of money market
  • To understand the interest rate derivatives as a risk management tool
Interest Rate Derivative Fees
  • Module Fees GST @ 18% Total Fees
    1700 306 2006

     Total Fees : Rs.2006/- (Rupees Two Thousand and Six Only). inclusive of GST.

About Us

An interest-rate derivative is a financial instrument with a value that increases and decreases based on movements in interest rates; among the most common are interest rate swaps, caps, and floors. Interest-rate derivatives are often used as hedges by institutional investors, banks, companies, and individuals to protect themselves against changes in market interest rates, but they can also be used to increase or refine the holder’s risk profile.

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Interest Derivatives Syllabus 


CHAPTER 1: Interest Rates and Time Value Of Money

  • Introduction;
  •  Factors affecting the level of interest rate;
  •  Impact and classification of interest rate and Present value,
  • Future value and Discount factor.

CHAPTER: 2 Money and Fixed Income Markets

  • Money markets and Fixed income markets.

CHAPTER 3: Government Bonds

  • Introduction to and Characteristics of Bonds;
  • Concept of yield;
  •  Relationship between bond price and interest rate;
  • Repo and cost of funding and other bond terminology.

CHAPTER 4: Interest Rate Derivatives

  • OTC Derivatives; Exchange traded contracts and key terminology of futures

CHAPTER 5: Interest Rate Futures (IRF) in India

  • Interest rate futures;
  • Rationale;
  • Contract specifications;
  • Settlement and Risk Management.

CHAPTER 6: An Explanation of Key Concepts in IRF

  • Why a notional bond is being used as underlying;
  • Conversion factor;
  • Invoice price;
  • Cheapest to deliver bond;
  • Bond basis.

CHAPTER 7: Applications and Trading of Interest Rate Futures

  • Participants in the IRF market;
  • Hedging applications of interest rate derivatives;
  • Speculation and Arbitrage strategy.